Recent Changes Reshape Owner Operator LMIA But There Are Alternatives
On February 18 it was officially announced that as of April 1, 2021, special processing instructions for the owner/operator category of the LMIA will be removed. Although the program will still technically exist, the removal of this special processing effectively cancels the owner operator program, as it will now follow the criteria of the regular LMIA.
Although the future of the program has been uncertain since information about proposed changes surfaced in late 2020, the complete removal of special processing may interfere with hopeful business immigrants’ future plans. Thankfully, there are still other options available.
LMIA Program Overview
The Labour Market Impact Assessment (LMIA) is a way for Canadian companies to get approval from Economic and Social Development Canada (ESDC) to hire a foreign worker. The requirement is in place as part of the Temporary Foreign Worker Program (TFWP) to help protect the labour market in Canada.
Among other criteria, there are two main requirements for obtaining a positive LMIA under the standard category. The first is that you demonstrate you placed a job advertisement to try to fill the position with a current Canadian resident or citizen. The second is that if hiring a foreign worker is approved, you must pay the foreign worker the prevailing wage in the region for the respective occupation.
Changes Under the Owner Operator LMIA
The owner operator LMIA currently waives the job advertisement requirement but it will be required beginning in April. Under the owner operator program, this measure was quite practical. As the Canadian Association of Professional Immigration Consultants (CAPIC) points out, a business owner will not be able to make an unbiased decision about hiring for a role they themselves wish to fill. Further, it will be extremely difficult in most cases to prove that the role of owner of the company cannot be adequately filled by a current resident or citizen.
The prevailing wage requirement will also now apply to owner operators. Currently, many business owners forgo paying themselves the prevailing wage of an Executive or Manager as it allows more cash to be put back into the business. Under the new rules, if they manage to receive a positive LMIA, this prevailing wage requirement may make cash flow management extremely difficult.
Who is Impacted & Who Can Still Apply?
Applications Before the Cutoff – The good news is that this is not expected to be applied retroactively. If you have already applied for the owner operator LMIA or you plan on doing so before April 1 so that your application is reviewed prior to April 1, 2021, you should be in the clear. The expectation is that these will be processed under the current parameters.
Current Work Permit Holders – There is naturally also concern among individuals currently in the country under an LMIA owner operator work permit. Given the approval happened prior to the decision, it is not expected that the nature of your current work permit will impede your chances of receiving permanent residency.
Future Applications – In cases where you can still meet the advertisement requirement and are prepared to pay yourself the prevailing wage for the position, you may still be successful. It will be challenging but may be possible in high demand industries like technology where it is difficult to fill roles with qualified citizens.
The LMIA owner operator program was a variation of the LMIA but several other LMIA exemption options and alternatives exist under the International Mobility Program (IMP) which may also be suitable. These include:
- Significant Benefit (Exemption Code: C10/C11) – Entrepreneurs, investors, or other individuals that can demonstrate they will provide a significant economic, social, or cultural benefit to the country may apply under either of these exemptions. The exact exemption that makes the most sense for you will depend on your specific circumstances and what you plan to do upon entering the country.
- Intra-company Transferees (Exemption Code: C12) – If you already own a venture in your home country, you may be able to come to Canada to open an office as an intra-company transferee.
Stay Updated and Know Your Resources
Unfortunately, there are still some questions that remain unanswered after this announcement. As further news is announced and clarity is gained, Joorney will keep you updated. Make sure to follow us on social media for the latest.
If you need help determining if you should still apply for the LMIA or if you should consider another program, we are happy to refer you to our network of trusted immigration consultants and lawyers. Whatever business immigration route you may choose to pursue, we will be here to help you with the corresponding business plans.